by Mark Johnston
With the continued decline in the average price of houses in the market these days by about 3 per cent lower since last April and over 20 per cent lower than this time in 2007. The seasonal signs are that spring has sprung all about us but there doesn’t seem to be any early spouts marking significant housing recovery.
The average house price, sitting at almost £200,000 a few years about has plummeted recently to about £160,000. One sign of recovery in the market is the fact that the average house price was around the £150,000 mark in 2009, slow progress but progress never the less.
The slow but sure recovery has attracted more sellers into the market and according to market insiders, there appears to be far more sellers than there are buyers. Not really a big secret if you’ve been reading this website for a few weeks. We reported earlier this month that homeowners are in serious danger of defaulting on their monthly payments, there is a significant increase in help for first time buyers and that these first time buyers are so strapped for cash, they prefer to rent property until they scrape the 10 per cent (if they are lucky) deposit together. Then, even having the deposit is not necessarily a guarantee that anyone will lend you money towards buying a house. The rules and criteria have been beafed up to protect the UK from a second housing bust and credit melt down.
This all said and done, serious buyer with serious money are in a very strong position, it’s a buyers market out there. The biggest issue since the crisis in 2007 is the availability of credit. Rates have improved recently on both the fixed rates and the tracker deals but the rules around who lenders will lend to and how much are still being normalised.
The British Bankers Association (BBA) revealed that just over 30,00 home loans were approved in April 2011 and that this figure was down by about 5000 on the same time last year and a massive decrease when compared to the 80,000 deals approved in 2006.
Chief executive of Marsh & Parsons said that “Mortgage lending is still a long way from where it needs to be. No one wants a return to the irresponsible lending practices seen before the credit crisis, but lenders must do more to help those looking to buy their first home. The average £25,000 deposit required is prohibitive for thousands of would-be buyers.”
More and more buyers are returning and purchasing in cash. We recently reported the huge increase in cash purchases, nearly 40 per cent of houses were bought for cash last year. There are changes on the horizon for the housing and mortgage market, those who are in a position to buy now are in the strongest footing and can get a good deal. Those who are on a less stable foundation will find help out there for them and they can rest assured that economic changes will filter favorably into the housing market
Story link - Breathing Life back into the Market
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